Exclusive: Pichai On Google's Vision, Mobile Revenue, Apple and China

Sundar Pichai, 42, has risen through the executive ranks at
Google at dizzying speed. In October, CEO Larry Page made Pichai his de-facto No. 2, at least when it comes to product. Pichai's portfolio includes Chrome, Android, search, ad technology, maps, social,commerce and infrastructure. That's just about everything Google does outside of YouTube, Google X, Nest, ad sales and a few other projects. Ahead of the Mobile World Congress in Barcelona next week, where Pichai will give a keynote, he granted an exclusive interview with Forbes, his first since he became Google's product czar. In the conversation, Pichai laid out his vision for Google products and touched on everything from search to Android, Google+,
Apple, China and Google Wallet. Below is an edited transcript.

Q: How has product development and vision at Google changed since you took charge of most product areas in October, and how is it going to change going forward?

A: Larry and I share overall goals. If you look back at Google search, it’s a product which worked for everyone in the world. It was very accessible and it was something which solved an important problem, that people used all the time. And it applies to billions of users. That’s the essence of what we get excited about – working on problems for people at scale, which make a big difference in [people’s] lives. A lot of my work is about making sure we continue to do that in our core products.

Q: Is there a difference in approach, on how teams work together?

A: I care about having what I would call focused innovation, which is a company at our scale having a clear sense of priorities of the things that matter and getting to focus on that, and at the same time pushing hard on innovations in each of those product areas. In addition, I am interested in enabling a set of areas that are reasonably independent so people can stay focused and leverage the scale of what Google has to offer only when needed. The bigger difference is now Larry is focused on a broader set of areas. He’s focusing across not just our core but beyond core as well.

Q: You have a huge portfolio that includes Android, Chrome, Search, ad technology, commerce, maps, social and infrastructure. Can you outline two or three top priorities where we are going to see change because you are pushing innovation aggressively?

A: The core of what Google is about is bringing information to people. You’ve seen us evolve search over the last many years. If you use search on mobile today, it is a very different product: you get answers, we focus on how we get you to the actions you need to quicker. It feels very different, and then we have things like Google Now. For me, evolving and innovating in those areas to make sure we assist users and help users with what they need at a deeper level at a more intelligent level [is a top priority]. There’s enough progress in core computer science areas that I think we can do that. That’s an important area. That’s the heart of what we do.

The second big area I focus on is computing and the core of things like Android and Chrome. Not just evolving the mobile experience we have today, thinking beyond mobile. I think users will use computing in many places, on multiple screens, it will be much more integral in their lives. So how do you evolve that experience, how do you make it more powerful. That includes core underlying Android, Chrome or cloud platform work and thinks like Google Play. I think there’s a lot to be done there.

It’s also important for us to make sure our monetization works because that’s the engine that helps us drive all this innovation. So thinking about monentization in the context of mobile and making sure we are doing interesting things is a big part of what I m focused as well.

Q: Are there things in the portfolio that you want to jettison, that you don’t think Google needs?

A: When I used the word focused innovation, the word focused matters. We go through a healthy pruning. We constantly look at stuff and say, is it working well. But that’s not the main thing for where we are. I see a huge opportunity to innovate.

Q: The one thing that comes to mind is Google+. We haven’t seen a lot of new things there and many people outside of Google think it’s been a flop. What are the lessons you learned from it? What’s the future for it?

A: Google+ has always meant two things for us. There’s the stream in the product that you see. And for us, Google+ was also a way by which Google after many years, we made sure there’s common [login and] identity across our products. The second part was in many ways even more important than the first part. That part has worked really well for us. In terms of the stream itself, based on the stats we see, we have a passionate community of users. We would definitely like to see more scale at what we do. The team is working on a few next generation ideas. But to us these are two different things, and I don’t think we have always done a good job of explaining that.

Q: There are other parts of Google +, like photos, which people seem to like but seem to have been dormant because they are part of the larger product.

A: We are actively working on all of these areas. To me, photos is an important area. I see that as a specific problem space that’s different from the [Google+] stream.

Q: Should we expect Google+ to remain as one big product?

A: I think increasingly you’ll see us focus on communications [Hangouts], photos and the Google+ stream as three important areas, rather than being thought of as one area.

Q: Lets talk about Android: Broadly how do you think about the state of the platform, the opportunities, the challenges, the areas that need focus.

A: To us Android is an enabling platform. It is a thriving, healthy, vibrant ecosystem. It was reported that there were over a billion Android devices shipped in 2014. The numbers are very very healthy. On top of it, we see tremendous diversity all the way from low end to the very very high end. I was fascinated to see during Thanksgiving holidays there were tablets on sale for $59. I bought them and used them, and you could pick it up and it worked well. It is important to understand that. Android serves the end-to-end spectrum. That’s what Android is intended to do. Going into [the fourth quarter of 2014], we saw tremendous momentum on Android. A lot of our partners reported that Android had some of the highest loyalty they’ve seen. Based on the science we can see, it looks very healthy and innovative.

Q: There’s a perception that as Samsung is going through some challenges, Apple is regaining share at the high end. Do you see that in the numbers?

A: Share is tough to assess. There is a lot of noise. Based on what we see things are healthy overall globally including the high end. Apple obviously has done very well with iPhone 6 and 6 plus, but we always expected that. We knew this would be a big upgrade cycle for them. To me looking at the momentum of having shipped a billion devices, people even on the high reporting high loyalty rates across Android, I haven’t seen anything to be concerned about. The bigger story here is a growing pie. All of us are doing well.

Q: What should we expect from you at the Mobile World Congress next week?

A: We are announcing Android for Work and it’s rolling out tomorrow. We have seen tremendous momentum behind Google Play. In the last 12 months, we paid over $7 billion dollars to developers. We are able to monetize it effectively for developers. It’s not just applications; the content ecosystem is getting built up. We are looking to do more there. Users are trying to discover apps and we are trying to improve the app discovery process. And developers are trying to reach users. If you step back, it’s a problem we solved with search and ads in search. Users are looking for information. We provide them with organic information, but at the same time we allow companies to use sponsored ads to reach users too. We think the same model works very well for Play. We are going to be rolling out the early phases of ways by which developers can reach users through Play as well.

Q: So that's a new way to monetize Play.

A: To me it’s both, just like search and search ads. As a user, that commercial information is also exceptionally useful to you. We will bring the best organic results to users. We will also let developers present the best results to users, and to be quality driven and experience driven.

Q: In spite of Google’s progress in mobile monetization, there’s a concern inside and outside the company, I think, that the shift to mobile is not favorable to Google. Is there a point where mobile becomes Google’s friend rather than a challenge to be overcome? And what do you need to do accelerate that?

A: To me, mobile is a huge opportunity. We are taking a long term view. For example, we could have done the Play thing earlier, but we were building out the experience. The way we have always approached this is making sure the platform works, that’s always been the higher priority for us. I think we are well positioned to do well on top of that. It’s not something we are particularly concerned about. When you look at all our core products, they do well in mobile. Even our mobile monetization. I think we are doing the shift well, and I see the momentum. Internally, we have very different cadences, we are working on long term things. The external narrative is one thing. For me, all I can focus on is making sure we are making progress against these opportunities.

Q: Are the search ads on Play a significant opportunity?

A: It is one of many things we are doing. It is an important step, given the scale of Play. It’s an exciting opportunity, but it’s one. Our monetization products are very robust and they work at scale, so it’s not one thing, it’s a series of these things which make a big difference.

Q: Can you talk about how many searches take place on Play?

A: (He laughs) No. No.

Q: Messaging outside of email has become huge, as proven by things like WhatsApp, Snapchat and Facebook Messenger. Does Google need a play there to be competitive?

A: We think about it at two levels. We build platforms. We don’t expect Google as a first party service to provide all the answers. Part of the reason a platform is successful is because there are very very important things from other companies and other developers on top of the platform. Things like WhatsApp are a great example of success that others have had on Android, which we see as welcome innovation on the platform. It’s great for users, it’s great for our platform and I think it’s a virtuous cycle. In the aggregate, we also care about building great services for people. At that level, we view communications as an important area. But that doesn’t mean the answer is always a vertical service. We do have products like Hangouts which we will invest in and evolve. But we also care about the platform in these areas, how we evolve the platform so we support others to do these innovations as well. It’s a more nuanced answer. It’s a more complicated approach. I think we are comfortable with where we are.

Q: At the same time, there are apps or services that become so important that companies like Google often feel they have to play in, like social was a few years ago.

A: Has Amazon done messaging? All I’m trying to say, is sure, is messaging a hugely important area. Is it going to be very successful? Yes. Does Google need to do every area in which success happens at scale for us to be successful? The answer is less clear. Sometimes some of the answers come from others too. I think it’s important to have that balance. I don’t define success by making sure we are in every important space.

Q: Your relationship with Apple is complicated. How concerned are you that you may lose them as a search partner on iOS?

A: There are areas with Apple in which we have always collaborated. We have had a long term search partnership. We work closely with them in areas like YouTube. When I look at search, largely the evolution depends on “are we bulding something which users need?” If we are building something that users need and there is a lot of value we are driving, I think how search manifests in iOS will work out just fine. We have a long term search partnership and are working together with them, and we’ll have to see.

Q: How long term?

A: I can’t comment on the partnership details.

Q: Tim Cook has been taking potshots at Google (and Facebook to some extent) for monetizing its users, saying that Apple is not in that business. How do you counter that?

A: Users use our services by choice. These are very loved products. We have many many products that have more than 1 billion users. They provide a lot of value. And we provide many of these services for free. It’s a bit irresponsible to say everything should be many hundreds of dollars [as most Apple products are]. We have figured out a way to provide important services to users responsibly. I think that matters. Most users if you ask them, they are comfortable with how it works.

Q: Is China a giant black hole for Google. Android is huge there, but the Android phones don’t have Google services or the Play store in the country. Would you like to go back into China?

A: China is obviously one of the biggest markets out there. Android is powering a lot of innovation in China. That’s important to me. It would be a privilege to serve Chinese users. We obviously have had a set of issues in the past, but we also see opportunities. We have seen a lot of interest from Chinese developers on Google Play, because the extent to which Android is used. We see those as opportunities ahead. If we can figure out a model by which we can serve those users, it would be a privilege to do so. So I don’t think of China as a black hole. I see it as a huge opportunity in which we are playing as an enabling platform today and hopefully we have a chance to offer other services in the future.

Q: How soon might that happen.

A: No comments on that.

Q: It’s presumably not entire in your control.

A: Obviously not. But we have seen a lot of interest.

Q: In payments, it looks like you are making a big push. What’s your leverage in a world where Apple has clearly taken the lead – I don’t know in actual numbers, but at least in terms of consumer enthusiasm for using tap and pay.

A: We’ve been working in this space for a while. For us the challenge has been getting Google Wallet enabled through the ecosystem. But we have a lot of renewed momentum. For people who use Google Wallet, the experience works. [The question is] how do you get Google Wallet present and how do you get all the point of sale terminals and the end-of-end ecosystem, the banks, the issuers. For me there’s been a lot of progress in the last few months. I’m very excited with our road map there. Stay tuned. We definitely expect to make important advances in this area.

Q: You talked about going beyond mobile. There’s been a lot of noise about Android in the Home, but penetration in the home is still pretty weak. How do you accelerate that?

A: We obviously have Nest. Having the core underlying Android platform support more of the Internet of Things use cases is a very high priority for us. You will see us make progress there, and we’ll have more to share.

Q: Another area where Google is seen as struggling is commerce. Paint a picture of the overall Google commerce strategy.

A: We already play a very important role in commerce. Search is an important part of commerce. I think we are still in the early days. A lot of our important advertisers and partners are ecommerce providers. We enable them, we support them. Android also plays a huge role in commerce. So we take an expansive view of commerce. When people write applications on Play and we support them with in app purchases, to us that is digital commerce. Commerce cuts across the breath of what we do.

A: Mobile changes a lot of things. In the online world, merchants are trying to reach users and we enable that. [With mobile] those things translate in to the physical world. So when we do things like Shopping Express we are still trying to enable merchants to reach users. It’s consistent to how we see the world. We want to push the boundaries.

Q: Can it become a profitable business?

A: It’s an important area so we are very committed to it. But it’s early days so we are focused in innovation. In areas like these we take a very long term view and see how the world evolves.

Q: What’s the state of your enterprise and productivity apps business?

A: We are doing really well. People are moving to great cloud services which work well on mobile and are easy to deploy. We are benefiting a lot from that. We are investing more and more, and it’s adding up to something very significant.

Q: Is the growth accelerating?

A: At that scale, I wouldn’t see it’s accelerating, but they are very very high growth numbers.

Q: What is Larry doing that he wasn’t doing before?

A: He spends time across everything we do. We share responsibilities on the core and we work together closely. In some ways we can divide can conquer when we see a specific problem. And I think it also helps him focus across the breath of Google, including some of the areas outside our core, and he can spend more time on those things.

Q: One last question. Your appointment has been described in various ways. You may quibble with it, but you’ve been called the No. 2, the heir apparent. Have you ever discussed succession with Larry or with the board. It’s not that I expect him to resign any time soon, but is this anything that has come into the conversation.

A: Part of the reason I’m here is because of Larry. Larry and Sergey are committed for the very very long term to the company. I’m partly here because they are here. I’m going to leave it at that.

Miguel Helft is the San Francisco Bureau Chief for Forbes. Follow him on Twitter at @mhelft.

I’m San Francisco bureau chief and technology editor at Forbes. I’ve been covering the tech industry from Silicon Valley since about the time of the Netscape IPO. I've worked at The New York Times, Fortune, the Industry Standard, the San Jose Mercury News, Wired and the Los>...